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Identifying malpractice and misconduct should be top priority for financial risk managers today
Corruption and Fraud in Financial Markets identifies potential issues surrounding all types of fraud, misconduct, price/volume manipulation and other forms of malpractice. Chapters cover detection, prevention and regulation of corruption and fraud within different financial markets. Written by experts at the forefront of finance and risk management, this book details the many practices that bring potentially devastating consequences, including insider trading, bribery, false disclosure, frontrunning, options backdating, and improper execution or broker-agency relationships.
Informed but corrupt traders manipulate prices in dark pools run by investment banks, using anonymous deals to move prices in their own favour, extracting value from ordinary investors time and time again. Strategies such as wash, ladder and spoofing trades are rife, even on regulated exchanges - and in unregulated cryptocurrency exchanges one can even see these manipulative quotes happening real-time in the limit order book. More generally, financial market misconduct and fraud affects about 15 percent of publicly listed companies each year and the resulting fines can devastate an organisation's budget and initiate a tailspin from which it may never recover.
This book gives you a deeper understanding of all these issues to help prevent you and your company from falling victim to unethical practices.
* Learn about the different types of corruption and fraud and where they may be hiding in your organisation
* Identify improper relationships and conflicts of interest before they become a problem
* Understand the regulations surrounding market misconduct, and how they affect your firm
* Prevent budget-breaking fines and other potentially catastrophic consequences
Since the LIBOR scandal, many major banks have been fined billions of dollars for manipulation of prices, exchange rates and interest rates. Headline cases aside, misconduct and fraud is uncomfortably prevalent in a large number of financial firms; it can exist in a wide variety of forms, with practices in multiple departments, making self-governance complex. Corruption and Fraud in Financial Markets is a comprehensive guide to identifying and stopping potential problems before they reach the level of finable misconduct.
Corruption and Fraud in Financial Markets identifies potential issues surrounding all types of fraud, misconduct, price/volume manipulation and other forms of malpractice. Chapters cover detection, prevention and regulation of corruption and fraud within different financial markets. Written by experts at the forefront of finance and risk management, this book details the many practices that bring potentially devastating consequences, including insider trading, bribery, false disclosure, frontrunning, options backdating, and improper execution or broker-agency relationships.
Informed but corrupt traders manipulate prices in dark pools run by investment banks, using anonymous deals to move prices in their own favour, extracting value from ordinary investors time and time again. Strategies such as wash, ladder and spoofing trades are rife, even on regulated exchanges - and in unregulated cryptocurrency exchanges one can even see these manipulative quotes happening real-time in the limit order book. More generally, financial market misconduct and fraud affects about 15 percent of publicly listed companies each year and the resulting fines can devastate an organisation's budget and initiate a tailspin from which it may never recover.
This book gives you a deeper understanding of all these issues to help prevent you and your company from falling victim to unethical practices.
* Learn about the different types of corruption and fraud and where they may be hiding in your organisation
* Identify improper relationships and conflicts of interest before they become a problem
* Understand the regulations surrounding market misconduct, and how they affect your firm
* Prevent budget-breaking fines and other potentially catastrophic consequences
Since the LIBOR scandal, many major banks have been fined billions of dollars for manipulation of prices, exchange rates and interest rates. Headline cases aside, misconduct and fraud is uncomfortably prevalent in a large number of financial firms; it can exist in a wide variety of forms, with practices in multiple departments, making self-governance complex. Corruption and Fraud in Financial Markets is a comprehensive guide to identifying and stopping potential problems before they reach the level of finable misconduct.
Identifying malpractice and misconduct should be top priority for financial risk managers today
Corruption and Fraud in Financial Markets identifies potential issues surrounding all types of fraud, misconduct, price/volume manipulation and other forms of malpractice. Chapters cover detection, prevention and regulation of corruption and fraud within different financial markets. Written by experts at the forefront of finance and risk management, this book details the many practices that bring potentially devastating consequences, including insider trading, bribery, false disclosure, frontrunning, options backdating, and improper execution or broker-agency relationships.
Informed but corrupt traders manipulate prices in dark pools run by investment banks, using anonymous deals to move prices in their own favour, extracting value from ordinary investors time and time again. Strategies such as wash, ladder and spoofing trades are rife, even on regulated exchanges - and in unregulated cryptocurrency exchanges one can even see these manipulative quotes happening real-time in the limit order book. More generally, financial market misconduct and fraud affects about 15 percent of publicly listed companies each year and the resulting fines can devastate an organisation's budget and initiate a tailspin from which it may never recover.
This book gives you a deeper understanding of all these issues to help prevent you and your company from falling victim to unethical practices.
* Learn about the different types of corruption and fraud and where they may be hiding in your organisation
* Identify improper relationships and conflicts of interest before they become a problem
* Understand the regulations surrounding market misconduct, and how they affect your firm
* Prevent budget-breaking fines and other potentially catastrophic consequences
Since the LIBOR scandal, many major banks have been fined billions of dollars for manipulation of prices, exchange rates and interest rates. Headline cases aside, misconduct and fraud is uncomfortably prevalent in a large number of financial firms; it can exist in a wide variety of forms, with practices in multiple departments, making self-governance complex. Corruption and Fraud in Financial Markets is a comprehensive guide to identifying and stopping potential problems before they reach the level of finable misconduct.
Corruption and Fraud in Financial Markets identifies potential issues surrounding all types of fraud, misconduct, price/volume manipulation and other forms of malpractice. Chapters cover detection, prevention and regulation of corruption and fraud within different financial markets. Written by experts at the forefront of finance and risk management, this book details the many practices that bring potentially devastating consequences, including insider trading, bribery, false disclosure, frontrunning, options backdating, and improper execution or broker-agency relationships.
Informed but corrupt traders manipulate prices in dark pools run by investment banks, using anonymous deals to move prices in their own favour, extracting value from ordinary investors time and time again. Strategies such as wash, ladder and spoofing trades are rife, even on regulated exchanges - and in unregulated cryptocurrency exchanges one can even see these manipulative quotes happening real-time in the limit order book. More generally, financial market misconduct and fraud affects about 15 percent of publicly listed companies each year and the resulting fines can devastate an organisation's budget and initiate a tailspin from which it may never recover.
This book gives you a deeper understanding of all these issues to help prevent you and your company from falling victim to unethical practices.
* Learn about the different types of corruption and fraud and where they may be hiding in your organisation
* Identify improper relationships and conflicts of interest before they become a problem
* Understand the regulations surrounding market misconduct, and how they affect your firm
* Prevent budget-breaking fines and other potentially catastrophic consequences
Since the LIBOR scandal, many major banks have been fined billions of dollars for manipulation of prices, exchange rates and interest rates. Headline cases aside, misconduct and fraud is uncomfortably prevalent in a large number of financial firms; it can exist in a wide variety of forms, with practices in multiple departments, making self-governance complex. Corruption and Fraud in Financial Markets is a comprehensive guide to identifying and stopping potential problems before they reach the level of finable misconduct.
Über den Autor
CAROL ALEXANDER, Ph.D., is Professor of Finance at the University of Sussex, Visiting Professor at Peking University PHBS Business School in Oxford and Co-Editor of the Journal of Banking and Finance. She is the former Chair of the Board of the Professional Risk Manager's International Association and she consults on model design for major exchanges, banks, and fund managers worldwide. She has edited more than a dozen books in finance and risk management and her sole-authored four-volume textbook on Market Risk Analysis (Wiley, 2008) remains the definitive guide to the subject after more than 12 years in print.
DOUGLAS CUMMING J.D., Ph.D., CFA, is the DeSantis Distinguished Professor of Finance and Entrepreneurship at the College of Business, Florida Atlantic University, and Visiting Professor of Finance at Birmingham Business School, University of Birmingham, and Royal Melbourne Institute of Technology. He has published 18 books and over 185 articles in leading journals such as the Academy of Management Journal, Journal of Financial Economics, and Review of Financial Studies, which have been cited over 15,000 times. He is the Managing Editor-in-Chief of the British Journal of Management and Journal of Corporate Finance, and the Founding Editor-in-Chief of the Review of Corporate Finance.
Inhaltsverzeichnis
About the Editors xv List of Contributors xvii Foreword xix Acknowledgements xxi Chapter 1: Introduction 1Carol Alexander and Douglas Cumming Part I What are Manipulation and Fraud and Why Do They Matter? 11 Chapter 2: An Overview of Market Manipulation 13T¿lis J. Putni¿ 2.1 Introduction 14 2.2 Definitions of Market Manipulation 16 2.2.1 Legal Interpretation and Provisions against Market Manipulation 16 2.2.2 Economics and Legal Studies Perspective 18 2.3 A Taxonomy of the Types of Market Manipulation 19 2.3.1 Categories of Market Manipulation 19 2.3.2 Market Manipulation Techniques 22 2.4 Research on Market Manipulation 26 2.4.1 Theoretical Literature 27 2.4.2 Empirical Literature 30 2.4.3 Conclusions from the Research on Market Manipulation 35 2.5 Summary and Conclusions 39 References 40 Chapter 3: A Taxonomy of Financial Market Misconduct 45Ai Deng and Priyank Gandhi 3.1 Introduction 46 3.2 Challenges in Research on Financial Market Misconduct 50 3.3 Defining Financial Market Misconduct 51 3.3.1 Price Manipulation 53 3.3.2 Circular Trading 54 3.3.3 Collusion and Information Sharing 55 3.3.4 Inside Information 56 3.3.5 Reference Price Influence 56 3.3.6 Improper Order Handling 57 3.3.7 Misleading Customers 58 3.4 Defining Financial Fraud 59 3.4.1 Credit Card Fraud 59 3.4.2 Money Laundering 60 3.4.3 Financial Statement Fraud 60 3.4.4 Computer Intrusion Fraud 61 3.5 Conclusion 61 References 61 Chapter 4: Financial Misconduct and Market-Based Penalties 65Chelsea Liu and Alfred Yawson 4.1 Introduction 66 4.2 Notable Cases of Financial Reporting Fraud 69 4.3 Financial Reporting Misconduct and Legal Redress 70 4.4 Evolution of US Financial Regulations 71 4.4.1 Private Securities Litigation Reform Act (1995) 72 4.4.2 Sarbanes-Oxley Act (2002) 72 4.4.3 Dodd-Frank Act (2010) 73 4.5 Legal versus Market-Based Penalties for Financial Misconduct 74 4.5.1 Common Forms of Legal Penalties 74 4.5.2 Role of Market-Based Penalties 75 4.6 Firm-Level Penalties for Corporate Financial Misconduct 75 4.6.1 Direct Economic Costs Captured in Loss of Market Value 83 4.6.2 Loss of Firm Reputation 83 4.6.3 Spillover of Reputational Effect 84 4.6.4 Governance Risk and Insurance Premiums 85 4.6.5 Reduced Liquidity 85 4.6.6 Access to Financing 85 4.6.7 Reduced Innovation 86 4.6.8 Mergers and Acquisitions 86 4.7 Individual-Level Penalties for Corporate Financial Misconduct 87 4.7.1 Executive and Director Turnover 87 4.7.2 Impaired Career Progression 95 4.7.3 Loss of Reputation 96 4.7.4 Executive Compensation 97 4.7.5 Strengthened Monitoring 97 4.8 Causes, Risks, and Moderators of Financial Misconduct 98 4.8.1 Fraud Incentives 98 4.8.2 Risk Factors 113 4.8.3 Public Enforcement: Regulatory and Judicial Stringency 115 4.8.4 Public Enforcement: Detection and Surveillance 116 4.8.5 Private Enforcement 117 4.9 Other Non-Financial Misconduct 118 4.10 Concluding Remarks 119 References 120 Chapter 5: Insider Trading and Market Manipulation 135Jonathan A. Batten, Igor Lon¿arski, and Peter G. Szilagyi 5.1 Introduction 135 5.2 Regulatory Framework on Insider Trading and Market Manipulation 140 5.3 Recent Examples of Market Manipulation and Insider Trading 145 5.4 Conclusions 148 References 149 Chapter 6: Financial Fraud and Reputational Capital 153Jonathan M. Karpoff 6.1 Financial Frauds in the 2000s 154 6.2 The Effects of Fraud Revelation on Firm Value and Reputational Capital 156 6.2.1 Market Value Losses When Financial Misconduct is Revealed 156 6.2.2 Spillover Effects 157 6.2.3 Reputational Losses for Financial Misconduct 158 6.2.4 Direct Measures of Lost Reputational Capital 159 6.2.5 Do Misconduct Firms Always Lose Reputational Capital? 160 6.2.6 Rebuilding Reputational Capital 161 6.3 The Effects of Fraud Revelation on Shareholders and Managers 162 6.3.1 Should Shareholders Pay? Do Managers Pay? 162 6.3.2 Do Shareholders Pay Twice? 162 6.3.3 Are Firm-Level Penalties Efficient? 163 6.3.4 Consequences for Managers and Directors 163 6.4 Why Do Managers Do It? Motives and Constraints 165 6.4.1 Motives for Financial Misconduct 165 6.4.2 Constraints on Financial Misconduct 167 6.5 Proxies and Databases Used to Identify Samples of Financial Statement Misconduct 168 6.6 Conclusion: Reputation, Enforcement, and Culture 170 References 171 Part II How and Where Does Misconduct Occur? 179 Chapter 7: Manipulative and Collusive Practices in FX Markets 181Alexis Stenfors 7.1 Introduction 181 7.2 Different Types of FX Orders 183 7.3 The Unique FX Market Structure 184 7.4 Examples of Manipulative and Collusive Practices in FX Markets 188 7.4.1 Front Running 188 7.4.2 Triggering Stop-Loss Orders 190 7.4.3 'Banging the Close' 192 7.4.4 Collusion and Sharing of Confidential Information 193 7.4.5 Spoofing 195 7.4.6 Market Abuse via Electronic Trading Platforms 196 7.5 The Reform Process 197 References 199 Chapter 8: Fraud and Manipulation within Cryptocurrency Markets 205David Twomey and Andrew Mann 8.1 Introduction 206 8.2 Why Do fraud and Manipulation Occur in Cryptocurrency Markets? 212 8.2.1 Lack of Consistent Regulation 212 8.2.2 Relative Anonymity 213 8.2.3 Low Barriers to Entry 214 8.2.4 Exchange Standards and Sophistication 214 8.3 Pump and Dumps 215 8.3.1 Case Studies 217 8.4 Inflated Trading Volume 217 8.4.1 Case Study: January 2017 and PBoC Involvement 219 8.5 Exchange DDoS Attacks 220 8.5.1 Case Study 223 8.6 Hacks and Exploitations 224 8.6.1 Exchange Hacks 224 8.6.2 Smart Contract Exploits 229 8.6.3 Protocol Exploitation 230 8.7 Flash Crashes 230 8.7.1 GDAX-ETH/USD Flash Crash 234 8.8 Order Book-Based Manipulations 235 8.8.1 Quote Stuffing 236 8.8.2 Order Spoofing 237 8.9 Stablecoins and Tether 239 8.9.1 Tether Historical Timeline 240 8.9.2 Tether Controversy and Criticism 242 8.9.3 Tether's Significance in Cryptocurrency Global Markets 245 8.10 Summary and Conclusions 245 References 249 Chapter 9: The Integrity of Closing Prices 251Ryan J. Davies 9.1 Why Closing Prices Matter 251 9.2 Painting the Tape and Portfolio Pumping 252 9.3 'Bang-the-Close' Manipulation: The Response of Financial Intermediaries 255 9.4 Stock Price Pinning on Option Expiration Dates 259 9.5 Conclusion: Lessons for the Regulation and Design of Financial Markets 263 References 269 Chapter 10: A Trader's Perspective on Market Abuse Regulations 275Sam Baker 10.1 Introduction 275 10.2 Getting the Trading Edge 278 10.3 A Typical Trader's Market Window 281 10.4 Wash Trades 282 10.5 High Ticking/Low Ticking - Momentum Ignition 284 10.6 Spoofing 286 10.7 Layering 290 10.8 Smoking 292 10.9 Case Study: Paul Rotter a.k.a. 'The Flipper' 295 10.10 The Innocent and the Guilty 299 10.11 What are Exchanges Doing to Prevent Market Abuse? 301 10.11.1 CME Group 301 10.11.2 ICE 302 10.12 What are Trading Companies Doing to Prevent Abuse? 302 10.13 Will There Be an End to Market Abuse? 303 Part III Who are These Scoundrels? 305 Chapter 11: Misconduct in Banking: Governance and the Board of Directors 307Duc Duy Nguyen, Jens Hagendorff, and Arman Eshraghi 11.1 Introduction 307 11.2 Literature Review 311 11.3 Research Design 312 11.3.1 Data 312 11.3.2 Empirical Design 313 11.3.3 Variables 314 11.4 Empirical Results 316 11.4.1 Main Results 316 11.4.2 Results for Different Classes of Enforcement Actions 320 11.4.3 Does Better Board Quality Alleviate Shareholder Wealth Losses? 323 11.5 Conclusion 323 References 325 Chapter 12: Misconduct and Fraud by Investment Managers 327Stephen G. Dimmock, Joseph D. Farizo, and William C. Gerken 12.1 Introduction 327 12.2 Related Research 329 12.3 The Investment Advisers Act of 1940 and Mandatory Disclosures 331 12.4 Data 332 12.4.1 Investment Fraud 332 12.4.2 Form ADV Data and Variables 337 12.5 Predicting Fraud and Misconduct 340 12.5.1 Predicting Fraud by Investment Managers 340 12.5.2 Interpreting the Predictive Content of the Models 345 12.5.3 K-Fold Cross-Validation Tests 346 12.6 Predicting the Initiation vs. the Continuance of Fraud 347 12.7 Firm-Wide Fraud vs. Fraud by a Rogue Employee 349 12.8 Out-of-Sample Prediction and Model Stability 351 12.9 Policy Implications and Conclusions 352 References 355 Chapter 13: Options Backdating and Shareholders 359Johan Sulaeman and Gennaro Bernile 13.1 Introduction 359 13.2 Stock Return Patterns around Option Grants 360 13.3 The Backdating Practice 361 13.4 Media Coverage, Restatement, and Investigation 362 13.5 Stock Market Reaction to Public Revelations of Backdating 363 13.6 Investor Reaction to (and Anticipation of) Public Revelations 364 13.7 Other Types of Misbehaviour Related to Option Grants 365 13.7.1 Forward Dating 365 13.7.2 Selective Disclosure 366 13.7.3 Option Exercise Backdating 366 13.7.4 Independent Director Backdating 366 13.8 Connections with Questionable Practices by Corporate Executives and Other Agents 366 13.9 Conclusion 367 References 368 Chapter 14: The Strategic Behaviour of Underwriters in Valuing IPOs 371Stefano Paleari, Andrea Signori, and Silvio Vismara 14.1 Valuing IPOs 371 14.2 The Underwriter's Incentives in the Valuation of IPOs 373 14.3 Literature Review 374 14.4 Sample, Data, and Methodology 376 14.4.1 Sample and Data 376 14.4.2 Alternative Selection Criteria of Comparable Firms 380 14.4.3 Valuation Bias and IPO Premium 380 14.5 Results 381 14.5.1 Algorithmic Selections 381 14.5.2 Affiliated and Unaffiliated Analysts 386 14.5.3 Underwriters' Selection of Comparable Firms Pre- vs. Post-IPO 390 14.5.4 Pre- vs. Post-IPO Selections and Industry Effects 394 14.6 Conclusions 396 References 397 Chapter 15: Governance of Financial Services Outsourcing: Managing Misconduct and Third-Party Risks 399Joseph A. McCahery and F. Alexander de Roode 15.1 Introduction 399 15.2 The Four Components in Outsourcing 402 15.2.1 Efficient Outsourcing 402 15.2.2 The Four-Factor Governance Model 404 15.2.3 Misconduct in Outsourcing and the Ability of Financial Institutions to Monitor 407 15.3 The Interaction between Contracting and Monitoring 408 15.3.1 Characterization of Financial Institutions 409 15.3.2...
Details
| Erscheinungsjahr: | 2020 |
|---|---|
| Fachbereich: | Betriebswirtschaft |
| Genre: | Importe, Wirtschaft |
| Rubrik: | Recht & Wirtschaft |
| Medium: | Buch |
| Inhalt: | 624 S. |
| ISBN-13: | 9781119421771 |
| ISBN-10: | 1119421772 |
| Sprache: | Englisch |
| Herstellernummer: | 1W119421770 |
| Einband: | Gebunden |
| Autor: | Alexander, Carol/Cumming, Douglas |
| Redaktion: |
Alexander, Carol
Cumming, Douglas |
| Hersteller: | Wiley |
| Verantwortliche Person für die EU: | Wiley-VCH GmbH, Boschstr. 12, D-69469 Weinheim, product-safety@wiley.com |
| Maße: | 251 x 173 x 43 mm |
| Von/Mit: | Carol Alexander (u. a.) |
| Erscheinungsdatum: | 22.06.2020 |
| Gewicht: | 1,195 kg |
Über den Autor
CAROL ALEXANDER, Ph.D., is Professor of Finance at the University of Sussex, Visiting Professor at Peking University PHBS Business School in Oxford and Co-Editor of the Journal of Banking and Finance. She is the former Chair of the Board of the Professional Risk Manager's International Association and she consults on model design for major exchanges, banks, and fund managers worldwide. She has edited more than a dozen books in finance and risk management and her sole-authored four-volume textbook on Market Risk Analysis (Wiley, 2008) remains the definitive guide to the subject after more than 12 years in print.
DOUGLAS CUMMING J.D., Ph.D., CFA, is the DeSantis Distinguished Professor of Finance and Entrepreneurship at the College of Business, Florida Atlantic University, and Visiting Professor of Finance at Birmingham Business School, University of Birmingham, and Royal Melbourne Institute of Technology. He has published 18 books and over 185 articles in leading journals such as the Academy of Management Journal, Journal of Financial Economics, and Review of Financial Studies, which have been cited over 15,000 times. He is the Managing Editor-in-Chief of the British Journal of Management and Journal of Corporate Finance, and the Founding Editor-in-Chief of the Review of Corporate Finance.
Inhaltsverzeichnis
About the Editors xv List of Contributors xvii Foreword xix Acknowledgements xxi Chapter 1: Introduction 1Carol Alexander and Douglas Cumming Part I What are Manipulation and Fraud and Why Do They Matter? 11 Chapter 2: An Overview of Market Manipulation 13T¿lis J. Putni¿ 2.1 Introduction 14 2.2 Definitions of Market Manipulation 16 2.2.1 Legal Interpretation and Provisions against Market Manipulation 16 2.2.2 Economics and Legal Studies Perspective 18 2.3 A Taxonomy of the Types of Market Manipulation 19 2.3.1 Categories of Market Manipulation 19 2.3.2 Market Manipulation Techniques 22 2.4 Research on Market Manipulation 26 2.4.1 Theoretical Literature 27 2.4.2 Empirical Literature 30 2.4.3 Conclusions from the Research on Market Manipulation 35 2.5 Summary and Conclusions 39 References 40 Chapter 3: A Taxonomy of Financial Market Misconduct 45Ai Deng and Priyank Gandhi 3.1 Introduction 46 3.2 Challenges in Research on Financial Market Misconduct 50 3.3 Defining Financial Market Misconduct 51 3.3.1 Price Manipulation 53 3.3.2 Circular Trading 54 3.3.3 Collusion and Information Sharing 55 3.3.4 Inside Information 56 3.3.5 Reference Price Influence 56 3.3.6 Improper Order Handling 57 3.3.7 Misleading Customers 58 3.4 Defining Financial Fraud 59 3.4.1 Credit Card Fraud 59 3.4.2 Money Laundering 60 3.4.3 Financial Statement Fraud 60 3.4.4 Computer Intrusion Fraud 61 3.5 Conclusion 61 References 61 Chapter 4: Financial Misconduct and Market-Based Penalties 65Chelsea Liu and Alfred Yawson 4.1 Introduction 66 4.2 Notable Cases of Financial Reporting Fraud 69 4.3 Financial Reporting Misconduct and Legal Redress 70 4.4 Evolution of US Financial Regulations 71 4.4.1 Private Securities Litigation Reform Act (1995) 72 4.4.2 Sarbanes-Oxley Act (2002) 72 4.4.3 Dodd-Frank Act (2010) 73 4.5 Legal versus Market-Based Penalties for Financial Misconduct 74 4.5.1 Common Forms of Legal Penalties 74 4.5.2 Role of Market-Based Penalties 75 4.6 Firm-Level Penalties for Corporate Financial Misconduct 75 4.6.1 Direct Economic Costs Captured in Loss of Market Value 83 4.6.2 Loss of Firm Reputation 83 4.6.3 Spillover of Reputational Effect 84 4.6.4 Governance Risk and Insurance Premiums 85 4.6.5 Reduced Liquidity 85 4.6.6 Access to Financing 85 4.6.7 Reduced Innovation 86 4.6.8 Mergers and Acquisitions 86 4.7 Individual-Level Penalties for Corporate Financial Misconduct 87 4.7.1 Executive and Director Turnover 87 4.7.2 Impaired Career Progression 95 4.7.3 Loss of Reputation 96 4.7.4 Executive Compensation 97 4.7.5 Strengthened Monitoring 97 4.8 Causes, Risks, and Moderators of Financial Misconduct 98 4.8.1 Fraud Incentives 98 4.8.2 Risk Factors 113 4.8.3 Public Enforcement: Regulatory and Judicial Stringency 115 4.8.4 Public Enforcement: Detection and Surveillance 116 4.8.5 Private Enforcement 117 4.9 Other Non-Financial Misconduct 118 4.10 Concluding Remarks 119 References 120 Chapter 5: Insider Trading and Market Manipulation 135Jonathan A. Batten, Igor Lon¿arski, and Peter G. Szilagyi 5.1 Introduction 135 5.2 Regulatory Framework on Insider Trading and Market Manipulation 140 5.3 Recent Examples of Market Manipulation and Insider Trading 145 5.4 Conclusions 148 References 149 Chapter 6: Financial Fraud and Reputational Capital 153Jonathan M. Karpoff 6.1 Financial Frauds in the 2000s 154 6.2 The Effects of Fraud Revelation on Firm Value and Reputational Capital 156 6.2.1 Market Value Losses When Financial Misconduct is Revealed 156 6.2.2 Spillover Effects 157 6.2.3 Reputational Losses for Financial Misconduct 158 6.2.4 Direct Measures of Lost Reputational Capital 159 6.2.5 Do Misconduct Firms Always Lose Reputational Capital? 160 6.2.6 Rebuilding Reputational Capital 161 6.3 The Effects of Fraud Revelation on Shareholders and Managers 162 6.3.1 Should Shareholders Pay? Do Managers Pay? 162 6.3.2 Do Shareholders Pay Twice? 162 6.3.3 Are Firm-Level Penalties Efficient? 163 6.3.4 Consequences for Managers and Directors 163 6.4 Why Do Managers Do It? Motives and Constraints 165 6.4.1 Motives for Financial Misconduct 165 6.4.2 Constraints on Financial Misconduct 167 6.5 Proxies and Databases Used to Identify Samples of Financial Statement Misconduct 168 6.6 Conclusion: Reputation, Enforcement, and Culture 170 References 171 Part II How and Where Does Misconduct Occur? 179 Chapter 7: Manipulative and Collusive Practices in FX Markets 181Alexis Stenfors 7.1 Introduction 181 7.2 Different Types of FX Orders 183 7.3 The Unique FX Market Structure 184 7.4 Examples of Manipulative and Collusive Practices in FX Markets 188 7.4.1 Front Running 188 7.4.2 Triggering Stop-Loss Orders 190 7.4.3 'Banging the Close' 192 7.4.4 Collusion and Sharing of Confidential Information 193 7.4.5 Spoofing 195 7.4.6 Market Abuse via Electronic Trading Platforms 196 7.5 The Reform Process 197 References 199 Chapter 8: Fraud and Manipulation within Cryptocurrency Markets 205David Twomey and Andrew Mann 8.1 Introduction 206 8.2 Why Do fraud and Manipulation Occur in Cryptocurrency Markets? 212 8.2.1 Lack of Consistent Regulation 212 8.2.2 Relative Anonymity 213 8.2.3 Low Barriers to Entry 214 8.2.4 Exchange Standards and Sophistication 214 8.3 Pump and Dumps 215 8.3.1 Case Studies 217 8.4 Inflated Trading Volume 217 8.4.1 Case Study: January 2017 and PBoC Involvement 219 8.5 Exchange DDoS Attacks 220 8.5.1 Case Study 223 8.6 Hacks and Exploitations 224 8.6.1 Exchange Hacks 224 8.6.2 Smart Contract Exploits 229 8.6.3 Protocol Exploitation 230 8.7 Flash Crashes 230 8.7.1 GDAX-ETH/USD Flash Crash 234 8.8 Order Book-Based Manipulations 235 8.8.1 Quote Stuffing 236 8.8.2 Order Spoofing 237 8.9 Stablecoins and Tether 239 8.9.1 Tether Historical Timeline 240 8.9.2 Tether Controversy and Criticism 242 8.9.3 Tether's Significance in Cryptocurrency Global Markets 245 8.10 Summary and Conclusions 245 References 249 Chapter 9: The Integrity of Closing Prices 251Ryan J. Davies 9.1 Why Closing Prices Matter 251 9.2 Painting the Tape and Portfolio Pumping 252 9.3 'Bang-the-Close' Manipulation: The Response of Financial Intermediaries 255 9.4 Stock Price Pinning on Option Expiration Dates 259 9.5 Conclusion: Lessons for the Regulation and Design of Financial Markets 263 References 269 Chapter 10: A Trader's Perspective on Market Abuse Regulations 275Sam Baker 10.1 Introduction 275 10.2 Getting the Trading Edge 278 10.3 A Typical Trader's Market Window 281 10.4 Wash Trades 282 10.5 High Ticking/Low Ticking - Momentum Ignition 284 10.6 Spoofing 286 10.7 Layering 290 10.8 Smoking 292 10.9 Case Study: Paul Rotter a.k.a. 'The Flipper' 295 10.10 The Innocent and the Guilty 299 10.11 What are Exchanges Doing to Prevent Market Abuse? 301 10.11.1 CME Group 301 10.11.2 ICE 302 10.12 What are Trading Companies Doing to Prevent Abuse? 302 10.13 Will There Be an End to Market Abuse? 303 Part III Who are These Scoundrels? 305 Chapter 11: Misconduct in Banking: Governance and the Board of Directors 307Duc Duy Nguyen, Jens Hagendorff, and Arman Eshraghi 11.1 Introduction 307 11.2 Literature Review 311 11.3 Research Design 312 11.3.1 Data 312 11.3.2 Empirical Design 313 11.3.3 Variables 314 11.4 Empirical Results 316 11.4.1 Main Results 316 11.4.2 Results for Different Classes of Enforcement Actions 320 11.4.3 Does Better Board Quality Alleviate Shareholder Wealth Losses? 323 11.5 Conclusion 323 References 325 Chapter 12: Misconduct and Fraud by Investment Managers 327Stephen G. Dimmock, Joseph D. Farizo, and William C. Gerken 12.1 Introduction 327 12.2 Related Research 329 12.3 The Investment Advisers Act of 1940 and Mandatory Disclosures 331 12.4 Data 332 12.4.1 Investment Fraud 332 12.4.2 Form ADV Data and Variables 337 12.5 Predicting Fraud and Misconduct 340 12.5.1 Predicting Fraud by Investment Managers 340 12.5.2 Interpreting the Predictive Content of the Models 345 12.5.3 K-Fold Cross-Validation Tests 346 12.6 Predicting the Initiation vs. the Continuance of Fraud 347 12.7 Firm-Wide Fraud vs. Fraud by a Rogue Employee 349 12.8 Out-of-Sample Prediction and Model Stability 351 12.9 Policy Implications and Conclusions 352 References 355 Chapter 13: Options Backdating and Shareholders 359Johan Sulaeman and Gennaro Bernile 13.1 Introduction 359 13.2 Stock Return Patterns around Option Grants 360 13.3 The Backdating Practice 361 13.4 Media Coverage, Restatement, and Investigation 362 13.5 Stock Market Reaction to Public Revelations of Backdating 363 13.6 Investor Reaction to (and Anticipation of) Public Revelations 364 13.7 Other Types of Misbehaviour Related to Option Grants 365 13.7.1 Forward Dating 365 13.7.2 Selective Disclosure 366 13.7.3 Option Exercise Backdating 366 13.7.4 Independent Director Backdating 366 13.8 Connections with Questionable Practices by Corporate Executives and Other Agents 366 13.9 Conclusion 367 References 368 Chapter 14: The Strategic Behaviour of Underwriters in Valuing IPOs 371Stefano Paleari, Andrea Signori, and Silvio Vismara 14.1 Valuing IPOs 371 14.2 The Underwriter's Incentives in the Valuation of IPOs 373 14.3 Literature Review 374 14.4 Sample, Data, and Methodology 376 14.4.1 Sample and Data 376 14.4.2 Alternative Selection Criteria of Comparable Firms 380 14.4.3 Valuation Bias and IPO Premium 380 14.5 Results 381 14.5.1 Algorithmic Selections 381 14.5.2 Affiliated and Unaffiliated Analysts 386 14.5.3 Underwriters' Selection of Comparable Firms Pre- vs. Post-IPO 390 14.5.4 Pre- vs. Post-IPO Selections and Industry Effects 394 14.6 Conclusions 396 References 397 Chapter 15: Governance of Financial Services Outsourcing: Managing Misconduct and Third-Party Risks 399Joseph A. McCahery and F. Alexander de Roode 15.1 Introduction 399 15.2 The Four Components in Outsourcing 402 15.2.1 Efficient Outsourcing 402 15.2.2 The Four-Factor Governance Model 404 15.2.3 Misconduct in Outsourcing and the Ability of Financial Institutions to Monitor 407 15.3 The Interaction between Contracting and Monitoring 408 15.3.1 Characterization of Financial Institutions 409 15.3.2...
Details
| Erscheinungsjahr: | 2020 |
|---|---|
| Fachbereich: | Betriebswirtschaft |
| Genre: | Importe, Wirtschaft |
| Rubrik: | Recht & Wirtschaft |
| Medium: | Buch |
| Inhalt: | 624 S. |
| ISBN-13: | 9781119421771 |
| ISBN-10: | 1119421772 |
| Sprache: | Englisch |
| Herstellernummer: | 1W119421770 |
| Einband: | Gebunden |
| Autor: | Alexander, Carol/Cumming, Douglas |
| Redaktion: |
Alexander, Carol
Cumming, Douglas |
| Hersteller: | Wiley |
| Verantwortliche Person für die EU: | Wiley-VCH GmbH, Boschstr. 12, D-69469 Weinheim, product-safety@wiley.com |
| Maße: | 251 x 173 x 43 mm |
| Von/Mit: | Carol Alexander (u. a.) |
| Erscheinungsdatum: | 22.06.2020 |
| Gewicht: | 1,195 kg |
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